EMC 2005 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2005 EMC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 121

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amortization expense on intangibles was $112.8 million, $109.3 million and $37.2 million in 2005, 2004 and 2003, respectively. As of December 31,
2005, amortization expense on intangible assets for the next five years was as follows (table in thousands):
2006 $141,903
2007 118,078
2008 95,370
2009 59,464
2010 49,757
Total $464,572
Changes in the carrying amount of goodwill, net, on a consolidated basis and by segment for the years ended December 31, 2005 and 2004 consist of
the following (tables in thousands):
Year Ended December 31, 2005
EMC
Information
Storage
Products
EMC Multi-
Platform
Software
EMC
Services
VMware
Other
Businesses
Total
Balance, beginning of the year $ 551,888 $ 2,204,230 $ 1,615 $ 526,681 $ — $ 3,284,414
Goodwill acquired — 610,402 17,483 4,427 — 632,312
Tax deduction from exercise of stock options — (10,466) — — — (10,466)
Finalization of purchase price allocations 878 (14,433) — (8,591) — (22,146)
Reduction in income tax valuation allowance — (607) — — — (607)
Balance, end of the year $ 552,766 $ 2,789,126 $ 19,098 $ 522,517 $ — $ 3,883,507
Year Ended December 31, 2004
EMC
Information
Storage
Products
EMC Multi-
Platform
Software
EMC
Services
VMware
Other
Businesses
Total
Balance, beginning of the year $ 551,888 $ 2,158,174 $ 1,615 $ — $ — $ 2,711,677
Goodwill acquired — 33,116 — 527,273 — 560,389
Tax deduction from exercise of stock options — (20,694) — (592) — (21,286)
Finalization of purchase price allocations — 37,450 — — — 37,450
Reduction in income tax valuation allowance — (3,816) — — — (3,816)
Balance, end of the year $ 551,888 $ 2,204,230 $ 1,615 $ 526,681 $ — $ 3,284,414
We test the goodwill balances for impairment at least annually. There was no impairment in 2005, 2004 or 2003.
C. Restructuring and Other Special Charges
In 2005, 2004 and 2003, we incurred restructuring and other special charges of $101.6 million, $56.1 million and $66.3 million, respectively.
The 2005 charge consisted of $17.4 million of IPR&D charges associated with acquisitions and $84.1 million for employee termination benefits
associated with work force rebalancing and reductions in force efforts and $0.4 million of costs associated with vacating excess facilities. Partially offsetting
these amounts were net adjustments of $0.3 million associated with prior years' restructuring programs.
55